With a voice vote last Wednesday, the US Senate voted to expand the existing $7,500 first time home buyer tax credit. The existing program, which is better described as a zero interest loan went into effect last spring, and has been available to first time home buyers only. The National Association of Home Builders. The newly proposed $15,000 first time home buyer tax credit, in its current legislative state, would be applicable to any home buyer, provided that the home is to be used as the primary residence for at least 24 months. The amount of the tax credit is actually 10% of the purchase price of the home or $15,000, whichever is less.

Different than the $7,500 program that it replaces, this tax credit does not have to be repaid to the government – it is a true tax credit. The proposed legislation will replace the old program on a specific date, and will be applicable to any home purchased by a first time home buyer after the enactment date. US News and World Report. Beyond the increase in scope of participation and increase in value, this proposal also offers some additional features that may be of significant value. For example, as long as the home is purchased before your 2008 taxes are due, the credit may be applied to your 2008 tax bill. Finally, there is no apparent restriction on income of the participants – come one, come all.

New York Times notes that this is one of two amendments to the stimulus bill that the US Senate endorsed by voice vote last week. This measure is anticipated to have a cost of $18.5 billion based on the anticipated volume of home purchases. The second measure endorsed by the Senate was a measure to provide incentive to buy new automobiles.

Bloomberg press reports that a Stimulus Bill approval vote is likely to come on February 10 in the Senate. Following this measure, the bill would have to be reconciled with the version passed by the House of Representatives last week. Both the Senate vote and the reconciliation process allow an opportunity for things to change from the currently proposed form.

Stay tuned. As soon as the legislation is finalized, I will post complete information on the details of the program, and how to access the benefits.

Posted on Monday, February 9th, 2009 at 1:23 pm and is filed under First Time Home-Buyers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.